India Inc's foreign funds swell 60%

Corporates raised Rs 58,071cr between Jan-Sep '05 as against Rs 36,294cr in year-ago period.

India Inc's overseas fund-raising through bonds, convertibles and equities jumped 60 per cent during January-September 2005 to Rs 58,071 crore from Rs 36,294 crore in the first nine months of 2004.

The increase does not come at the cost of domestic fund-raising. In the first nine months of 2005, corporate India raised Rs 48,080 crore from domestic bond issues and IPOs. The comparable figure last year was Rs 48,760 crore.

Subir Mehra, head of commercial banking, HSBC, said, "The overall credit offtake, inclusive of domestic and overseas borrowings, has recorded a sharp rise in 2005 compared with 2004. This is largely attributed to the strong growth in the country's GDP." In the quarter ended June 30, 2005, India's GDP grew by 8.1 per cent year-o-year.

ABN Amro Bank's Global Clients Head (India) Brijesh Mehra said, "The two key reasons why there has been a sharp rise in offshore borrowings of Indian corporates are global liquidity and low interest rates. There is an increased use of convertibles (foreign currency convertible bonds) as corporates are able to set a higher conversion price given the booming Indian equity market."

The other reason for this huge rise in overseas fund-raising is the robust investment climate with most corporates raising resources to finance capacity addition on the back of healthy order books.

Funds raised via overseas syndicated loans during January-September 2005 jumped 63 per cent to $6.91 billion from $4.22 billion a year earlier. But the amount raised through overseas bond issues is lower in 2005 at $3.43 billion against $3.91 billion in the same period of 2004.